HSBC's downward revision is in line with similar kind of revisions by a host of other think-tanks, research houses, investment banks and other agencies like the UN, Morgan Stanley, Goldman Sachs, Merrill Lynch, Stanchart and Citi.
Though there has been policy progress in Europe, the global economic backdrop remains decidedly challenging, Eskesen said, adding domestic conditions have remained fairly stable, though, and underlying inflation has stayed firm.
Though trade deficit is expected to 'narrow' in 2013 driven by ongoing curb of gold imports and the gradual removal of fuel subsidies, the deficit will still be 'sizeable', it said.
Decision to hinge on Q3 GDP, Feb inflation data and supply-side reforms in the Budget
HSBC on Thursday said the Indian economy, which is projected to grow at 5.7 per cent this fiscal, is likely to grow at a faster pace next fiscal at 6.9 per centfollowing the recent spate of policy reforms.
The HSBC India Manufacturing Purchasing Managers' Index, a measure of factory production, stood at 51.3 in April, unchanged from 51.3 in March, amid moderate expansion of incoming new business orders.
Private sector output in India expanded for the first time in 8 months in February as slump in the services sector moderated and manufacturing grew at a stronger pace, an HSBC survey said.
The recovery in manufacturing is still likely to prove "protracted" given the lingering structural constraints.
The HSBC India Composite Output Index, which maps both services and manufacturing, increased from 48.9 in March to 49.5 in April, but remained below the crucial 50 mark which indicates contraction for the second successive month.
The HSBC/Markit purchasing managers index for the manufacturing industry stood at 50.1 in July, slightly more than 50.3 in June, indicating a broad stagnation of manufacturing operating conditions in India.
HSBC PMI falls to 50.7, slow domestic demand offsets pick up from abroad.
The HSBC/Markit Purchasing Managers Index for the services industry inched up to 47.2 in November from 47.1 in October, the fifth sub-50.0 reading and indicated an output contraction across the Indian service economy.
New business orders fall at faster pace, with index at 47.6 in March from 49.5 in February.
The HSBC/Markit Purchasing Managers Index for the services industry fell to 46.7 in December from 47.2 in November, registering the sixth consecutive monthly drop in output levels, the longest period of continuous reduction since the 2008/2009 global financial crisis.
The HSBC India Manufacturing Purchasing Managers' Index for the manufacturing industry climbed from 49.6 in October to 51.3 in November on the back of a rebound in new orders and output.
The HSBC/Markit purchasing managers index for the services industry inched up to 47.1 in October from 44.6 in September, the fourth successive monthly contraction of service sector output across India.
India's manufacturing sector activity contracted for the third straight month in October amid falling levels of production and new orders, as the business climate within the country remained tough, an HSBC survey said on Friday.
The index has posted below the 50 mark, which marks contraction, for the third consecutive month.
India's manufacturing sector activity contracted for the second consecutive month in September as both output and new orders witnessed a decline, an HSBC survey said.
The HSBC India Composite Output Index, which maps both services and manufacturing activity, fell to 48.4 in July, down from 50.9 in June, indicating an overall contraction.
The HSBC Markit Services Purchasing Managers' Index fell to 51.7 in June from May's three-month high of 53.6, in a sign that Asia's third-largest economy is still struggling to climb out of a quagmire of low growth and high inflation.
India's manufacturing sector activity remained broadly flat in June as new orders declined for the first time in over four years and power cuts and fragile economic conditions weighed on the sector's performance, an HSBC survey said.
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Although the survey pointed to the softness in demand leveling off, a complete recovery is still some way off.
Economic recovery in US, euro zone help; new orders sub-index at 52.4
India's private sector activity contracted further in August, reflecting faster contractions of both manufacturing and services output, amid decline in new orders and tough economic conditions.
India's current account deficit which narrowed in the second quarter of this fiscal, however, is likely to widen during the second half of FY 2013-14 as seasonal demand bring in more imports, an HSBC report says.
The new orders sub-index, which includes domestic demand as well as orders from abroad, rose to 53.2 in May
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According to the global financial services major, the primary concern for the RBI at the moment has to be anchoring elevated inflation expectations and stabilising the currency, which could face renewed pressures if the Fed begins QE tapering this week, as widely expected.
The monsoon has so far disappointed and if rainfalls do not increase soon it will push up inflation as well as the subsidy bill, further limiting the room for RBI rate cuts, an HSBC report says.
There's need to address growth, but weak rupee putting pressure on prices.
Terming the RBI action on Wednesday as a "pleasant surprise", analysts today cautioned that possibility of a rate hike in the future cannot be ruled out. Urijit Patel committee's report on monetary policy would clear the air on RBI's future stand, they added.
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